MercoPress. South Atlantic News Agency

Brazil planning a 10% tax on revenue from nuclear power operations

The Angra dos Reis nuclear plant in the state of Rio do Janeiro

Brazil’s electricity producing nuclear plants, under the umbrella of Eletronuclear may face a 10% tax on revenue from its nuclear power operations as the country prepares to expand arrangements that target profits from oil and gas and its distribution among local governments.

A draft law was approved this week by the Committee on Mines and Energy which would see any company 'exploiting nuclear power' pay 10% of related revenue to local governments as a kind of compensation. The proceeds, based on gross electricity generation, would be split between the local municipality, the local state and potentially neighbouring states as well.

A revision this week changed the language from targeting users of 'nuclear energy' to avoid hitting the 3000 facilities around Brazil where nuclear technology is used in science, medicine, agriculture and industry. The term 'nuclear power' narrows it down solely to generation of electricity at state owned Eletronuclear's Angra power plant in Angra dos Reis, about 100 kilometres east of Rio de Janeiro. Other types of power generation are not included.

Angra features two pressurized water reactors that between them generate 1990 MWe gross. Plant systems use 106 MWe of this, giving net generation for transmission of 1884 MWe. A third unit is under construction and slated to start up in 2016 and in recent years Brazilian leaders have proposed four further reactors to be completed in the 2020s.

Before becoming law the draft legislation needs approval from three other committees: on Economic Development, Industry and Trade; Taxation, Finance and Constitution; and Justice and Citizenship. The tax mirrors one brought in late last year in the oil and gas sector. Known as ‘Participação Especial’ (Special Participation), this applies a complex formula to raise revenue for local government from highly profitable extraction projects.

Nuclear power from Angra accounts for 3% of Brazil's electricity supply. Some 84% comes from hydro, 5% from coal, 4% from biomass and about 4% from gas.